The construction wages theft law, which takes effect on January 4th, 2022, is legislation which puts the “contractor”, meaning the construction manager, general or prime contractor, liable for unpaid wages owed to a worker by any subcontractor on any level of the project. This legislation is not just something for public work; it encompasses private work, as well. Under this new law the contractor is liable for up to three years for this liability.
The law does not allow an employee or subcontractor to sign an agreement or release to waive the contractor’s liability, except under a collective bargaining agreement made by a bona fide building and construction trade labor union.
This is a hot topic, trending in all the construction related associations that TBC sits on boards of and works with. It has both the general contractors and subcontractors taking notes. Along with COVID-19 administrative duties, supply chain issues, and labor shortages, this is one more task for business owners to keep on their minds. Subcontractors should expect to see extra information requested from contractors, such as certified payrolls and/or certification that all workers are paid. Contracts could contain robust indemnification clauses and/or require payment bonds.
Sides that oppose the new bill feel that the extra procedures could cause payment delays and the cost of projects to increase. In addition, possible problems insuring projects, along with putting a high level of risk on contractors. Sides that back the bill believe that it’s a big win for the working class, with the hope it will eliminate wage theft and create greater oversight on construction sites and safer working environments. United fronts know the importance of protecting the members of the labor force, opposition is more focused on whether this is the right way to do it and who should be liable. Please contact your trusted TBC Advisor for more information.